Famously, if apocryphally, Zhou Enlai when asked about the impact of the French revolution replied, “It’s too early to tell.” The same may be said about the impact of the Thatcher-Reagan revolutions of the 1980s. The debate over the influence of the new right on society and politics has continued for over thirty years without any firm conclusions. It is difficult to deny that in a world where the market is king, and the provision of collective goods from refuse collections to prisons and international security is now in private hands, that the role of government is significantly different to the brave new social democratic world that emerged during the post-war boom. Yet, although the growth of market liberalization and long-term critique of big government is now embedded in the language of politics, it also true that through law, regulation, and finance the state continues to influence almost all aspects of every day life. In addition, at least until the 2008 financial crisis, public spending increased inexorably in nearly every developed state in the world. The paradox is that whilst the New Right undoubtedly shapes the agenda of politics, expectations on politicians to deliver are firmly embedded in the electorate and governments continue to act in relation to collective goods. We have in many ways what Gamble described as “a free market and strong state” (Free Economy and Strong State 1994).
The two books under review both attempt to assess the impact of neo-liberalism (or, its British form, Thatcherism) in different ways. Schulman’s book is a comparative study of the Labour governments in Australia, New Zealand, and the United Kingdom focusing on the impact that neo-liberalism had on labour-union relations, and Farrell and Hay’s edited collection provides a more detailed analysis of the various policy impacts of Thatcherism.
Schulman focuses on how Labour parties in Australia, New Zealand, and the United Kingdom have been influenced by neo-liberalism. His conclusion is clear: “Ultimately, it is union-labour party relations which determine how marginalized the unions affiliated to labour parties can become and, by extension, how quickly the neoliberal leadership of labour party governments can initiate—or continue and deepen, as in the British case—radically pro-market economic policies” (p. 90). Despite his search for an explanatory factor that differentiates the three countries, Schulman suggests that the “economic policies of the three labour-party governments are quite similar.”
Farrell and Hay take both a broader and more detailed approach than Schulman. Locating their volume consciously in the debates about Thatcherism in the 1980s and 1990s, their edited collection examines a series of policy areas and social outcomes including economic policy, social security, education, housing, and crime. Each of the chapters is a useful historical summary of policy change and each has a nuanced understanding of the complex social and political interactions that produce changes.
What is apparent is that, as the Farrall and Hay’s book illustrates, across all policy areas there have been major changes in the delivery policy: The economy has been liberalized, social security has shifted from a element of social democratic citizenship to a sign of moral failure, and education has been both marketised and managerialised. Probably most significantly, the chapters of Dorling and Walker show how the Thatcher government made the poor poorer and increased inequality, thereby reversing the trends of the previous thirty years. There can be little doubt after reading Farrell and Hay that the impact of Thatcherism and the New Right has been profound both in how services are delivered but also more importantly, what the aim of those services is now.
Undoubtedly the impacts and significance of policy changes are apparent. What is difficult to determine is the extent to which these changes are the result of ideology or broader social, political, and economic changes. There is little doubt that the form of social democracy that existed in Britain between 1945 and 1975 was historically and geographically specific and that as early as the 1960s many of its elements were starting unravel. Full employment was increasingly difficult to maintain, the relationship between the unions and the Labour party was becoming increasingly fractious, and the costs of welfare were difficult to contain. Hence, it is not clear whether what is known as Thatcherism is cause or effect. In this context, one of Farrell and Hay’s conclusions is important: They suggest that “Thatcherism’s economic legacy” can be summarized as a “liberalizing disposition” (p. 329). This point is in many ways the core of the issue: What the neo-liberalism did was change the way we think about the world. Many policy options such as economic planning or nationalization are eliminated from agendas of even those seen as political radicals, such as Jeremy Corbyn in the United Kingdom and Bernie Sanders in the United States. Neo-liberalism may have struggled in changing policies but it has been successful in changing politics.
The other conclusion is that what emerges is a “complex and uneven picture of public policy radicalism…The Thatcher administrations were radical for their first election, but they were cautiously radical…” (p. 333). As the work of Paul Pierson, The New Politics of Welfare (1992) has illustrated, radical reform is often impeded by institutional and political forces. Farrell and Hay do not really explain the paradox of reforms in the UK; the more things change, the more they remain the same. There is little doubt that welfare services have undergone a radical transformation, but Britain still has the universal and free provision of both health and education, and whilst social services and social assistance have been subject to a long period of retrenchment, they continue to provide a wide range of support.
Farrell and Hay provide a useful historical and empirical review of the sorts of changes that have occurred as a result of the British version of the New Right. As they point out, Thatcherism was never neo-liberal but a combination of conservative traditions with New Right thinking. The book is slightly weaker in the conclusion—rather than providing an assessment of the empirical evidence, they tended to focus on the conceptual arguments related to the debates around Thatcherism in the 1980s and 1990s. Consequently, their conclusion is more a dated conceptual discussion and only provides a limited overview of the impact and continuing influence of Thatcherism.
Schulman, at one level, goes beyond the Farrell and Hay in providing an explanation for the impact of neo-liberalism on Labour parties in his case study countries. He argues that unions are in a position to attempt to limit the impact of economic reforms by developing an economic and political strategy to strengthen the autonomy of Labour parties—without this, Labour parties will “instigate neoliberal economic policies.” What Schulman ignores here is again the issue of causality. It may have been changes in the economy that weakened the Unions and not neo-liberalism or Labour governments. Unions were strong in a period when economies were dominated by production of industrial goods in concentrated spaces during a time of high levels of employment. The end of the post-war boom, increasing unemployment, the decline in large scale manufacturing (and the concomitant decline of the working class), and a growing sense that the Unions were too powerful led to a change in their position that was independent of Labour Parties. This was a point recognised in 1979 by Eric Hobsbwam in his Forward March of Labour Halted? Labour parties could not achieve power solely on the basis of working class votes. In addition, at least in the British case, the representation of the Union movement in the 1970s and 1980s led many voters to be wary of union power and their ability to influence Labour governments. Hence the social and economic changes of the late post-war years were forcing Labour parties to search for a broader alliance; voters who were cynical about the cost and effectiveness of welfare policies and no longer supportive of the trade union movement in the same way. Thatcherism’s strength was its ability to exploit this feeling to win a broader support for their anti-state and anti-unions policies. This is what Labour parties were reacting too, rather than a simple case of Unions losing influence. They lost influence as a consequence of multiple factors.
Schulman ends up with a one-dimensional explanation of the Labour governments of recent years that fails to properly define social democracy and lacks a historical understanding of Labour governments. Schulman presents the compromises of Labour to the market as something new, but actually this has been a fundamental feature of social democracy since it has been part of government. Labour governments have always had to reconcile their vision of welfare and social justice to existing forms of capitalism. The good fortune of Labour governments from 1945 until the 1980s was that social democracy fitted more easily with the capitalism of the post-war boom that the less regulated capitalism of the global era. What is clear is that Labour governments did accept many of the market reforms of their era, but there is a question of their room for manoeuvre. Moreover, their aims were often traditional social democratic goals of encouraging economic growth in order to expand public spending and welfare. The British Labour government certainly used the legislative framework created by Thatcher to limit the influence of the Unions. Yet, at the same time the Unions continued to have a role through funding and election of leaders.
Both books are a useful addition to our understanding of the real impact of the New Right on policy and outcomes and re-emphasize the impact of the ideological turn of the 1980s. Schulman’s broad claims are more open to question than the specific policy based chapters in the Farrell and Hay volume. Nevertheless, Schulman, whatever differences of interpretation there may be, does provide a strong historical and comparative study of how both Labour parties and movements responded to the growing predominance of markets and labour legislation.
